The Department of Education (DOE) today announced that 87% of school
districts statewide had effectively managed their administrative costs,
and kept bureaucratic spending in their proposed FY 2004 - 2005 budgets
to a minimum. The announcement demonstrated the effectiveness of Administration
efforts to work with local districts and set reasonable guidelines that
place more money in the classroom.

"We have worked hard and made tough choices to provide districts
with the largest amount of direct school aid ever distributed in New
Jerseys history," said Gov. James E. McGreevey. "At the
same time, we continue to work with the districts to get every dollar
possible into the classroom."

"It is very encouraging to see that a sizable majority of districts
share our vision," the Governor said. "When we see the success
of our reforms taking hold in the districts, it means children will receive
an efficient and effective education, and that we are fulfilling our
obligation to property taxpayers."

Recognizing that a small minority of districts are still budgeting over
the guidelines for reasonable administrative costs, the DOE notified
those school districts they will need to revisit their budgets to curtail
excessive bureaucratic spending. All of the districts are being directed
to reallocate the overages to classroom initiatives, or to provide property
tax relief. However, since many of these districts are actually on the
cusp of falling within the spending guidelines, the Department expects
resolution for those districts with some minor reallocations.

As Governor McGreevey outlined in his FY 2005 Budget address, Commissioner
of Education William L. Librera and the DOE will be working cooperatively
with these districts to assist them in reallocating or eliminating excessive
costs.

"We are very pleased that almost all of the school districts in
the state have budgeted their administrative spending limits appropriately," said
Assistant Commissioner Richard Rosenberg. "We remain optimistic
that the remaining school districts will take a hard look at their costs
and get them below the spending threshold established by the state. It
is important to note that these districts will be addressing this issue
with their local board first."

"We continue to encourage these districts to budget accordingly
and work to lower their administrative costs so the money can be spent
where it belongs: in the classroom or to provide property tax relief," Rosenberg
said.

In February, the DOE encouraged school districts to budget their administrative
expenses within regionally-established thresholds. The effort is not
a punitive exercise, rather, it continues to be an effort to curtail
excessive costs so that children are best served, and property taxpayers
are not unduly burdened. More information will be available once the
budget process is complete and all appeals have been examined.

The districts were notified via letter today. A final list of school
districts with excessive costs and a loss of state aid will be available
after all public budget hearings and additional reviews have been exhausted
and final determinations have been made. All school districts have the
right to request a secondary review of administrative spending by April
15.